By Staff Reporter
ISLAMABAD: The government has announced its largest single-day reduction in fuel prices in recent memory, slashing petrol by Rs74 per litre and high-speed diesel by Rs67 per litre — a move Prime Minister Shehbaz Sharif presented on Friday as both an economic dividend of easing global oil markets and a vindication of Islamabad’s months-long diplomatic gambit to broker peace between Washington and Tehran.
The new rates, which take effect at midnight, will bring petrol down to Rs299.78 per litre and high-speed diesel to Rs311.78 per litre, once a formal notification is issued by the Ministry of Finance. The announcement came hours after Sharif told parliament that a “significant” reduction in fuel prices would be announced later in the day as oil prices continued to fall following the US-Iran agreement that ended months of conflict between the two countries.
The cuts represent a dramatic reversal of fortune for consumers, who have endured one of the most turbulent periods in the country’s history of fuel pricing. The conflict, which began in late February, disrupted energy supplies and shipping through the Strait of Hormuz, a critical artery for global oil trade, driving up oil prices and forcing import-dependent countries such as Pakistan to contend with sharply higher fuel costs. At its worst, the government raised petrol prices in April by Rs137 per litre, taking them to a record Rs458.4 per litre. Diesel had climbed to Rs520.35 per litre. The human cost of those months — in higher transport fares, food prices and household bills — is only now beginning to reverse.
The Islamabad Memorandum of Understanding entered into force this week, with Iran instantly reopening the Strait of Hormuz and the United States lifting its naval blockade — the two conditions whose absence had kept global oil markets on edge since late February. PM Sharif signed the historic document as mediator on Thursday, formalising a major diplomatic breakthrough between the United States and the Islamic Republic of Iran. US President Donald Trump signed the document while visiting French President Emmanuel Macron at the Palace of Versailles, while Iranian President Masoud Pezeshkian signed the accord in Tehran.
Sharif was unsparing in linking Friday’s relief package to that agreement. “We had made a promise to the nation,” he said in a statement issued by his office. “By the grace of Allah, we are now fulfilling it.” He acknowledged the hardships endured by ordinary Pakistanis during the crisis and thanked them for what he called their “extraordinary patience and resilience”.
The prime minister said the government had sought to cushion consumers from the worst of the price spike throughout the conflict. He said the federal government spent Rs129 billion — secured through austerity measures and the development budget — to provide maximum relief during the crisis. He also claimed Pakistan had avoided the fuel rationing that some countries were compelled to introduce, insisting there had been no queues, no shortages and no disruption to petroleum supplies at any point — an assertion the government has consistently made, though one that has attracted some scepticism given the scale of the price increases imposed.
Petrol is the fuel of choice for Pakistan’s lower and middle classes — the millions who rely on two-wheelers, rickshaws and small cars to commute and earn. Diesel is the backbone of the heavy transport sector, carrying goods across the country’s highways and powering agricultural machinery from tractors to tube wells. Sustained increases in both hit the poorest hardest, feeding through to higher food prices and transport costs in ways that official headline figures rarely capture.
The journey to Friday’s cuts was turbulent. In the first wartime revision on 6 March, the government hiked petrol and diesel prices by Rs55 per litre. When petrol later hit its peak, Sharif moved to reduce it within 24 hours by announcing an Rs80 per litre reduction in the petroleum levy — a decision that looked as much like political management as economic policy, amid fierce public backlash. Since then, reductions had trickled through in increments — Rs22 as an Eid gift, then Rs4 cuts on successive weeks — before Friday’s far larger announcement.
In his statement, Sharif was generous in distributing credit for both the peace deal and the economic management that accompanied it. He singled out Field Marshal Asim Munir, who holds the dual role of Chief of Defence Forces and Chief of Army Staff, for what he described as his “untiring efforts” in making the Islamabad memorandum possible. He also paid tribute to Deputy Prime Minister Ishaq Dar, Interior Minister Mohsin Naqvi and the entire government team for their participation in the peace efforts, and praised Finance Minister Muhammad Aurangzeb, Planning Minister Ahsan Iqbal and Petroleum Minister Ali Pervaiz Malik for steering the economy through the crisis.
The Islamabad Memorandum was primarily brokered by Pakistan, with Qatar, Saudi Arabia, Turkey and Egypt also facilitating negotiations. Sharif vowed that any further decline in international oil prices would be passed on to consumers in full — a commitment that will be tested in the weeks ahead as markets adjust to the post-conflict landscape.
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